S Shares Jump 7% on Q2 Earnings Beat and Robust Fiscal 2026 Guidance

Core Insights - SentinelOne (S) shares have increased by 7.1% following the release of its second-quarter fiscal 2026 results, driven by strong new customer acquisitions, platform adoption, and growth in AI-powered security solutions [1][8] - The company reported earnings of 4 cents per share, exceeding the Zacks Consensus Estimate by 33.33%, compared to 1 cent per share in the same quarter last year [1][8] Revenue and Growth - Revenues for the second quarter reached $242.2 million, reflecting a year-over-year increase of 21.7% and surpassing the consensus estimate by 0.07% [2][8] - Annualized recurring revenues (ARR) grew by 24% year over year to $1 billion, with customers generating over $100,000 in ARR increasing by 23% to 1,513 as of July 31, 2025 [3][8] Operating Performance - The adjusted gross margin for the reported quarter was 79%, a decrease of 50 basis points year over year [4] - Total operating expenses rose by 13.1% year over year to $186.1 million, driven by increases in research and development (up 29%), sales and marketing (up 5.8%), and general and administrative expenses (up 15.3%) [4] - The non-GAAP operating margin improved to 2.2%, up from a loss of 3.2% in the previous year [4] Financial Position - As of July 31, 2025, SentinelOne had cash, cash equivalents, and investments totaling $1.2 billion [5] - Free cash outflow increased by 31.5% year over year to $7.1 million, with a free cash outflow margin remaining stable at 3% [5] Future Guidance - For the third quarter of fiscal 2025, SentinelOne anticipates revenues of $256 million, indicating nearly 22% year-over-year growth [6] - The company has raised its fiscal 2026 revenue guidance to a range of $998 million to $1 billion, representing a 22% year-over-year growth [6][7] - The adjusted gross margin for fiscal 2026 is expected to be between 78.5% and 79% [6]